Eric Sprott: "The Financial System Is A Farce"

2011 was a merry-go-round of more bailouts, more deferrals and more denial. Everyone is tired of the Eurozone. It’s not fixable. There’s too much debt. The politicians don’t know what’s going on. Nothing has structurally changed. We’re still on the wrong path. There’s more global debt than there was a year ago, and it’s the same old song: extend and pretend, extend and pretend,… around and around we go,… and it isn’t fun anymore.

Just as we wrote back in October 2007, and again in September 2008, we feel compelled to state the obvious: that the financial system is a farce. It’s a complete, cyclical farce that defies all efforts to right itself. This past year continued the farcical tradition with some notable scandals, deferrals and interventions that underscored the system’s continuing addiction to government interference. With the glaring exception of US Treasuries and the US dollar (which are admittedly two of our least favourite asset classes), it was not a year that rewarded stock picking or safe-haven assets. Many developments during the year bordered on the ridiculous, and despite some positive news out of the US, we saw little to test our bearish view. If anything, our view was continually re-affirmed.

Let’s start with MF Global. With more than two months passed since the scandal broke, federal officials are still unable to find the estimated US$1.2 billion of missing customer funds.1 The whole episode has been a disaster for the CME, the self-regulatory body in charge of making sure the futures brokers play by the rules. Normally in instances of broker bankruptcy, the CME is supposed to backstop client accounts and keep them liquid – i.e., allow them to continue trading while the bankruptcy gets settled. It never happened in this case. Client accounts were frozen for weeks. Funds have remained missing for months – an eternity for clients who were caught short. The great shock was watching how inept and incapable the CME was in 1) preventing the fraud in the first place and 2) recovering client assets during the aftermath. The CME essentially copped out of their responsibility, offering little more than some perfunctory press releases along the way. They were also surprisingly quick to offer excuses for their non-action. According to CME, it really wasn’t their fault, since CME had “no control over the disposition of customer segregated funds that are held by MF Global and not by CME Clearing”.2 Their on-site review of MF Global’s operations the week before its bankruptcy suggested that the brokerage firm was in full compliance of all the rules, so it wasn’t really the CME’s problem. But of course it was their problem. That’s what the CME is there for – to protect clients in cases of fraud or bankruptcy. To protect the “integrity of the exchange”.

In the weeks that have passed, a curious web of transactions have surfaced between MF Global, JP Morgan and Goldman Sachs. Before its bankruptcy, MF Global had been drawing down a $1.2 billion revolving line of credit with JP Morgan. In bankruptcy court, JP Morgan was able to negotiate a lien on some of MF Global’s assets in exchange for paying $8 million towards bankruptcy costs. According to Reuters, “The lien puts JPMorgan’s interests ahead of MF Global customers who have not yet received an estimated $900 million worth of money from their accounts, which remain frozen as regulators search for missing funds.”3 It is also alleged that JP Morgan accepted a roughly $200 million transfer from MF Global the day before its bankruptcy to cover an overdraft in MF Global’s trading account held with them (it still isn’t clear if JP Morgan has the cash).4 MF Global also appears to have sold hundreds of millions worth of securities to Goldman Sachs in the days leading up to its collapse, but did not immediately receive payment for them from the MF Global’s clearing firm, none other than JP Morgan.

To be fair, on November 22nd, the CME did offer to pledge $550 million as a guarantee to the SIPC Trustee in the event that they did not recover all of the missing client funds, but we cynically wonder if that pledge was made after they finally figured out where all the money had gone. The CME seems to have had a good idea by early December, based on comments made by Commodity Futures Trading Commission (CFTC) member, Jill Sommers.5 The bottom line is that MF Global’s client interests and security appear to have been side-stepped to buy time for bigger, more important players to cover their losses (asses), and that is not the way the regulatory system is supposed to function.

We’re not naïve – we know the government will always protect the interests of the big banks over paltry retail investors, but do they have to be so brazen about it? The MF Global episode is basically shameless. Then there’s Dodd-Frank. Remember Dodd-Frank? It’s the massive financial regulatory reform act that was signed into law by President Obama back in 2010. We are certainly not fans of cumbersome overregulation, but in its essence, Dodd-Frank was supposed to provide a new framework to address the potential failure of a too-big-to-fail bank. There’s nothing wrong with that. Given the sheer size of the off-balance sheet derivatives market, we don’t see a problem with at least attempting to prepare for another large scale banking failure in the US. But almost two years later, we have to laugh at how little of the Dodd-Frank framework has actually been implemented. According to law firm Davis Polk, a mere 21% of the act’s 400 rulemaking requirements have become finalized since the law passed in July 2010. Of the 200 Dodd-Frank rulemaking requirement deadlines that have already passed, 74.5% of them have been missed to date.6 The lawyers must be having a field day with all the paperwork.

One part of the Dodd-Frank story that interests us is the CFTC positions limits rule set to go into effect on January 17, 2012. The new position limits are aimed at preventing excessive speculation in the commodity markets which are believed by many, including ourselves, to have driven wild fluctuations in the gold and silver spot price over the past decade. Position limits are an obvious threat to large futures speculators like the big banks, so it was no surprise when two Wall Street lobby groups, the Securities Industry and Financial Markets Association (SIFMA) and the International Swaps and Derivatives Association (ISDA) launched a lawsuit against the CFTC demanding that the new rules on commodity trading be thrown out, or at the very least, delayed. The CFTC voted on the request to delay implementation and officially rebuffed it on January 4th, which is a heartening development in an otherwise cynical saga.7 Back in December, however, the CFTC had already quietly waived the position limit filing requirements on all CME participants until May 31, 2012.8 So even if the new rules go into effect this month, banks won’t have to report their position levels until May 31st either way. Given the lobby groups’ outstanding lawsuit against the new rules, combined with the CFTC’s apparent tendency to grant temporary reprieves, we don’t expect the new position limit rules to be enforced any time soon. Once summer approaches, there will probably be more delays and more deferrals, granting the big players plenty of time to protect themselves. Extend and pretend. Delay and defer. That’s the song we sing on the merry-go-round.

Then there’s Europe and the European Central Bank (ECB). Back in December, the mighty ECB had to step in with yet another massive liquidity injection to avert a total meltdown in the EU banking system. On December 21st, they flooded 523 separate EU banks with a “Long Term Refinancing Operation” (LTRO) program totaling €489.1 billion ($626 billion).9 The program consists of loans that are due in three years and will charge an accommodating 1% interest rate. The liquidity injection will allow the EU banks to participate in a delightfully convenient carry-trade whereby they can take the borrowed money at 1% interest and invest it in various sovereign debt auctions that will likely pay them 3% or higher. The banks will keep the difference in profit, and the EU PIIGS countries get to breathe easier knowing they’ll be able to sell their garbage paper to the EU banks at suppressed rates as long as the LTRO loan money lasts. And the best part? It doesn’t involve any money printing, so there’s really no risk of inflation, you see? So just so we’re on the same page, if everything goes according to plan this year, European sovereign governments will fund their debt auctions with borrowed money lent to them by over 500 European banks who have themselves borrowed hundreds of billions of euros from the European Central Bank,… who as far as we can tell, borrowed those euros from the various EU sovereign states (or simply printed them). Do you get it? Do you see the circularity? Do you see the can being kicked down the road? And guess what? Since €489.1 billion is clearly not enough to avert disaster this year (most EU banks are so undercapitalized they’ve simply parked the borrowed LTRO money back with the ECB at 0.25% interest), the ECB has promised to launch another LTRO injection this coming February!10 No wonder gold was down in December. They completely solved the European debt crisis!

Last but not least, we must mention an alarming component of this year’s National Defense Authorization Act (NDAA) that was quietly signed into law by President Obama on December 31st, 2011. This year’s defense bill, officially known as Senate Bill 1867, includes a specific provision that seems to grant the US government the power to detain accused terrorists, including US citizens, indefinitely, without trial.11,12 There has been much uproar and confusion over the language used in the sections of the Bill related to the subject, and it’s still not clear how the Bill will change the existing laws related to terrorism detention in the US, but it doesn’t bode well for constitutional freedom within the country. There’s obviously no direct market impact to the legislation, but we mention it only to remind investors how quickly the rules can change when governments feel vulnerable. ‘Political risk’ should no longer only be applied to mining investments in third world countries. In 2012, it may apply to us all.

It’s very difficult to predict what lies in store for the stock market this year. Anything could happen. Government intervention in the financial system has never been more extreme. We hope the examples above have shed some light on that. As we enter 2012, there are significant debt-related financial risks festering within the three great economic theatres of the world: the US, Europe and China. The market may rally, it could crash, it could tread water, we just don’t know. A lot will depend on how the central banks react. But we are eager to maintain the positioning that we held in 2011. We will maintain our exposure to precious metals equities and bullion. We will maintain our large gross short weightings in our hedge funds. We are confident that they will protect us on this farcical merry-go-round that seems to spin faster and faster with every passing day.

He doesn't set the NAV, it's available for any investor to see. I agree, it doesn't make that much sense to buy his fund at 30% premium to NAV, but others think it's worth it and feel safer doing so than buying SLV etc. There is no secrecy and deception to anyone willing to look up the NAV; easy.

I know, lets elect Mitt "Flip Flippity Flopping" Romney and a repug congress and raise the national debt to 99 bernankillion dollars and live like there's no tomorrow, or party hard until the earth explodes in December of this year. Those repugs sure do talk a big game about getting government spending under control but LOVE putting the printing presses into hyperdrive!

"If you are DRS holder (registered holder of the stock in your own name, noone can short it)."

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Yeah, and if MF Global held your PMs in a warehouse and you had a warehouse receipt for your PMs there was no way you could lose your PMs... Untill MF went belly up and the warehouse receipts turned out to be more pieces of worthless paper.

If you continue to believe that bankers are going to play by the rules and that regulators will protect you then you are simply naieve.

"If you are DRS holder (registered holder of the stock in your own name, noone can short it)."

................................

Yeah, and if MF Global held your PMs in a warehouse and you had a warehouse receipt for your PMs there was no way you could lose your PMs... Untill MF went belly up and the warehouse receipts turned out to be more pieces of worthless paper.

If you continue to believe that bankers are going to play by the rules and that regulators will protect you then you are simply naieve.

Golden Monkey... It would help if you began your posts with an indication of who you are responding to.

I don't have a secret service... in case you were responding to my comment.

Also, I don't believe that blood in the streets is necessary.

Passive resistance, ie; close bank accounts, refuse to use credit cards, buy PMs, use local credit unions, etc, will be more effective than violent resistance. Violence will give the goons an excuse to turn the dogs of war loose on civilian populations. The best course, imo, is to get out of debt and stay out of debt... that will slay the dragons of Wall St and their lap dog pols.

Lennon you've said that a couple of times over the past couple of days, how much of an issue do you see shorting a silver a closed end trust unit like PSLV is, particularly with such a premium attached?

Not trying to be a douche I'm just wondering whether this product is something that would be wise to short, personally I expect the shorts to get whats due them in the coming months as the not STUPID folks take out all the available physical.

On shorting in general, some of the folks round here have started taking delivery of thier actual shares and storing them in their own safe as they believe that is the only way you truly own anything..... even paper..

I am going to give you the shorthand here, so please excuse me if I am not clear.

The ones providing the major short positions are those running the power structure (JPM etc). They do this at the bequest of the Fed. They scratch each others backs in many ways: PDs buy USTs and the ed services the debt, the PDs short silver/gold, etc. This needs to be done so that the Fiat Ponzi is still upright. The Fiat Ponzi relies on the dollar. The dollar trades inversely oil. Oil trades 1:1 the PM complex. So this is why the ponzi must short silver.

They don't care if they lose money. It is not about the money, it is about control. They have done all of this manipulation to establish the Police State. They had to make money along the way to keep the power, so they front ran the shit. The allowed the dot com/housing/UST bubbles for that purpose (killing two birds with one stone by destroying the middle class).

That is why they can lose some cash on their shorts. They do want to get as much out of the ponzi while they can, but there are greeater needs than pennies.

We know the markets are a farce, Sprott knows it, everybody knows it. There is a quiet run on the banks and quiet run on the markets with the little people pulling out. MF Global helped wake people up. Was glad to see 38K farmers file suit against Corzine personally, and others that were complicit.

They may be, but it is a slow wake up, the kind where you realize you are not sleeping but you can't stand out of bed. The one where you don't have your motor functions and lie in a daze.

People have pulled out of what they call "the market" (stocks) but they stay in cash, maybe they own MUNIs. Still, they are in the system. That is the thing: barely anyone understands the main points of the Fiat Ponzi.

So you mean that you actually own GLD and SLV? This is jot a jab at all.....or do you hold the metals in a safe.

Me, I have the physical metals, but about as much as I'm comfortable storing on my premises.

I also own PHYS, and PSLV. PSLV I am considering selling because of the GIGANTIC premium to NAV, which I have never seen a good explanation as to why. There are some "speculations," yet no real solid facts that can be backed up. I've asked Eric King if he can get Sprott or Embry to adress this....afraid they will just talk thier book though.

Comments please?

(And do hold up on the "of you don't hold it, you don't own it"....I understand.)

No, I most definitely do NOT own any GLD or SLV. Although I was once naive enough to have done so, I have long since divested myself of those sham ponzi shells of supposedly metal-backed ETFs. The only money that I would ever even hypothetically consider investing in relation to them now would be to short them in view of their eventual and inevitable collapse.

They're having ground control issues, just a mine engineering problem, nothing nefarious, but I'm surprised Jamie hasn't volunteered to send the mine a few truckloads of shotcrete out of his own pocket to keep the silver supply going.......

To the untrained eye all is well, including the stock market. In reality the stock market is a barometer for inflationary monetary policy which is one of the two forces eroding away at your purchasing power and the purchasing power of dollars. That's why there's been decoupling from economic fundamentals aka all that's deflating and "wrong" like today's retail sales report showing a 3.9% decrease in electronics sales.

The paper economy is inflating. But the real economy is tanking. And the two are locked in a self-reinforcing vicious cycle. Unlike troubles we've had in the past, we're beyond the point where the vicious cycle can be unwound. Get prepared for a rocky year both economically and politically

...did you know D.C. water kills Goldfish? Yeah, watching dead fish in a shrinking pool of municipal water. You dump ill liquidity into the fishbowl and the buggars are instantly upside down and the naked truth shortly fails to deliver smiles to the kids.

Hey cosack actually this is quite good for the stock if you think about it bc in one year there is a good chance silver will be above 50 so instead of depleting their mines like morons selling at such low silver prices they keep the stuff in the ground. True there are capex needs to upgrade the mine but not as bad as people think i would venture. If silver rockets this year, they will look like geniuses..

The key driver is that we collapsed. Not had a setback, not a bump in the road, we completely collapsed. And the most important moment since the civil war was upon us. Our government had a choice to make. And they chose to bail out the very criminals that collapsed us.

This began the "nothing matters" society that proceeds a revolution. Then what was supposed to be John F. Kennedy to the Martin Luther King power turned out to be a two-bit banker.

"Nothing matters" became full blown surreal insanity. Down became up. Bad became good. The criminals began openly looting the store and our government brazenly assisted them before our eyes.

Animal Farm has started and a police state is emerging.

Yes, under normal times a farce would be bad. But this is surreal insanity, so farces are now bullish.

I gave you a thumbs up. You hit the nail on the head. The way a coroner arrives at a cause of death. With cold and callous candor you lay it out there as plain as can be. Once great America has been fitted with a toe tag.

Indeed. We're enduring the in-plain-sight bailout of a nation's rapists, while those very rapists, secure in the arms of our governmet openly mock their bailers. This undercuts why we would even exist as a nation.

Tens of millions have lost most everything and are ready to burn this fucker down.

I too gave you an upvote quacker, as it's good to acknowledge "where we are."

but maybe a small change of words - "nothing matters" that we've been taught to believe matters, and it's time to scrupulously take stock of what really DOES matter going forward - this will vary from individual to individual, but to begin to change life/lives according to just what really matters to YOU and yours is the next step. . .

the "holidays" are over, time to make some adjustments to what matters. . .

Yes, the NDAA was passed and they can hold Americans suspected of being terrorists indefinitely. OK, what about the bilions in spending attached to that bill? $662 Billion. I don't know which is worse.

Not to mention the sanctions in the bill, which step on the neck of Iran and any other country that does business with the US but gets it's oil from Iran. Poasibly making them more irrational and desperate. I like the statement from Donald Sutherland in JFK: "in that document lay the Vietnam War" In NDAA may lie WWIII.

It's plain to me which is worse. Indefinite detention for an American suspected of being a terrorist is absolutely worse. The reason being, they can use pretty much anything against you, don't have to bring charges, don't have to let you see a lawyer, don't have to tell anyone why you're being detained. That, to me, is fucking scary.

the MFGlobal BK was probably directed by the SEC to the stock-broker type BK where the (re-) colateralized assets are shuffled and dealt to the creditors from our "local shadowBanking bother & cistern-hood"

if the BK had been more along the design used for commodity brokers, the squid, morgue, and other top predators would have stood behind the account holders in the pay-back line

but, their bankster bosses had set up the whole thing to be run thru the wrong BK in the first place, and they were told to STFU and present this bilge-water & barf and instead of defending the interests of the commodities traders they just served them up to the multi-national bankstering interests of the crimex

so, the CFTC is sure earning its pay, again, today!!!

bifurcate the damned BK proceedings if you need to and treat the bona fide commodities traders as commodities traders before the (BK) law!

STOP! the never-ending bullshit about "looking for the money" and just figure out a judicial manner to claw it back from the shadow banksters who received it and restore the assets to the proper individual account-holders

pretty-please, you viscious toy-boy asswipe banksters

after all, if the political cover for these decisions wanes, and possibly even if it doesn't, there's enuf of a public record to figure out who to go after with the FOA requests and RICO subpoenas isn't there? ass-u-me-ing that this highly-levered "support of the euro & sovewreign debt" was planned and orchestrated by banksters during the CHF devaluation and swiss bankster support of ditto, up to & including the "exit"

the days of dithering by "auditors", who was involved, and who said & did what around MFG's lies and misrepresentations about its financial decisions leading up to the final travesty of a BK are all well-documented and have already been published, haven't they?

The U.S. mint announced that January sales of Gold AND Silver Eagles surged to near record levels in "the first days" of the month. The "first days" being by January 3rd which by the way was THE 1st business day of the month. Yes, Silver Eagle sales were higher than ANY full month except for Jan and Sept. of last year and the first month of sales back in 1986!

We are to believe that this was ALL done in one business day?

No, the sales were actually logged in Dec., you remember that don't you? Dec. saw both Gold and Silver prices trashed and supposedly investors were regurgitating their positions because as Dennis Fartman said, "the Gold bubble has popped and now in a bear market".

Yes, AGAIN...just like May for Silver and Sept. for Gold of last year, the "price" collapsed while demand exploded higher. I don't know what planet anyone else lives on but I payed good money to attend a university where they taught me that prices go down because of marginal selling and up because of marginal buying. Of course these sales were reported by the mint as "January sales" but you must understand that "they" think we are stupid.

"They" did not want to report ALLTIME RECORD SALES for Dec. while another arm was trashing the price, that would not add up now would it?

No, instead they report a monthly record that was all ordered and purchased in just one day BEFORE the close of business that day! "They" figured that "we" are so stupid that we couldn't put 2+2 together?

Do you see that last month's bullshit hammering of price was done with paper contracts as the real physical metal was being gobbled up? Do you see WHY it will be so hard for Sprott to actually source 50 million ounces of Silver that must be of the "real" variety as opposed to worthless paper contracts stating that they "really really really will deliver the metal"?

Hellooo...CFTC... Bart Baby and da Boyz...are you watching?

Did you AGAIN see that you are presiding over a tail market that is wagging the physical dog's body? Do you not see that paper levered at least 100 to 1 at a minimum is making "price discovery"?

How is your 4 year "investigation" into the Silver market going? Anything yet?

No... didn't think so.

The CFTC is really stuck. Just another "damned if you do, damned if you don't" scenario. They surely cannot admit the truth that these markets are a fraud because they would start a run on supposed inventories. They also cannot give a clean bill of health because when it all blows up, well, they were already on record telling the world that "all is well. Besides, even an illiterate monkey can see the manipulation" so why beat a dead horse, right?

So here we are, sitting, waiting, watching and being irritated by the obvious lies churned out by the paper markets. But sitting, waiting and watching what? Simple... until the last dregs of supply run out or physical demand "demands" delivery to the point of a default. Or of course, until a billionaire steps up with a measly paper order and asks for delivery that cannot be filled.

It really is this simple folks. The paper suppression schemes have for 15 years enhanced the real physical demand, slowly at first and now with a force that will turn into a buying panic. This is not rocket science, this is pure street logic that an 8th grade dropout couldn't miss. It is so funny to watch CNBC trot out "experts" who spout the stupidity that Gold and Silver are "oh so risky".

the financial system is a farce. It’s a complete, cyclical farce that defies all efforts to right itself. This past year continued the farcical tradition with some notable scandals, deferrals and interventions that underscored the system’s continuing addiction to government interference. With the glaring exception of US Treasuries and the US dollar...

The common denominator with "US Treasuries" and the "US Dollar", (aka frn), is Mr. Timothy Geitner's robo-signed Linda Green.

(This is not to be confused with the original term of endearment of a "John Hancock" that gracefully adorns the US Declaration of Independence.)

The only thing Mr. Geitner’s official autograph never made it to was a proper IRS 1040 in the time frame required by law.

The custodian of the Sprott Physical Gold Trust’s gold bullion is the Royal Canadian Mint, which stores it unencumbered and fully allocated in the name of the Trust. The Trust’s auditor audits the physical count of the bullion on a yearly basis.

Isn't that the very same Royal (sic) Canadian Mint that lost millions of dollars worth of gold bullion a couple of years ago? I remember how Jon Nadler nearly blew a gasket when people holding gold accounts with them (and with several TBTF Canadian bullion banks) started losing trust in the Mint, asking for their physical metals instead. Damn, how publicly indignant and hysterical that made him! That in and of itself made the effort worth it, but his response to the situation was to me VERY revealing of just what his agenda really is, and to just whom he owes his loyalty --- and it is NOT with Kitco's customers, or gold holders in general.

As I recall, they had a plausable excuse for the accounting error. There were some stories about possible theft, nothing came of it. Gold physically held is no doubt best. If you can afford large purchases and storage fees held in a trusted facility, maybe that is second best. I just think that PHYS is safer than GLD. I also have a little more trust in the Canadian Mint than others.

There were unsubstantiated rumors at one point that KITCO didn't actually hold the PMs they sold in unallocated accounts but instead were using futures to hedge that obligation and were playing around with investors money. Anyone who is holding PMs in an unallocated account is an idiot, plain and simple. At the time it was not clearly understood how a company could cheat an investor using this vehicle, now I would assume everyone knows after MF Global. It's hard to understand what kind of company would go into the PM business and hire a guy like nadless nadler. I just take it for granted that there is something underhanded going on with them because he makes no sense as an analyst for a PM company.

This says it all. For osme reason, lawmakers are protecting bank profits as if society cannot live without banks which are leveraged 100 to 1. Banks should have 25% of capital (real capital). If these banks were properly capitalized, we would never need LTROs or a fed window or any of this crap.

Enough already with taxpayer subsidies and guarantees. We need a stable banking system and not a system which constantly teeters on the brink. Is BAC going down to $5 and up to $7 a sign of stability. Does it imply that the bank is viable? BAC should be forced to raise $200B in additional equity.

If you are not into the 9-11 hoax, the religion hoax, the environmental issues, etc., just stick with the financials which run from 1:16:09 to somewhere in the 1:40:00 range and from 0:42:15 into the 1:20:00 range in the second movie. You can thank me later...

But it's always cheering to hear from big figures in the biz community that are not afraid to use aggressive language toward the rotten (and very bankrupt) establishment

Right so back to the Rothchild media and listening to how the Fed, ECB, BoJapan and BoEngland are going to fix, and grow, the economy out of Depression by printing Triillions of fake nano-digits ...i'm all ears

“This year’s defense bill, officially known as Senate Bill 1867, includes a specific provision that seems to grant the US government the power to detain accused terrorists, including US citizens, indefinitely, without trial.”

“‘Political risk’ should no longer only be applied to mining investments in third world countries. In 2012, it may apply to us all.”

When a guy who is a multi-billionaire is concerned about indefinite detention without trial where the accusation is the sole justification then we should be absolutely concerned.

we mention it only to remind investors how quickly the rules can change when governments feel vulnerable.

is a huge red flag waving, a warning to recognise who ultimately has the power in a nationstate, and to understand and act acordingly (and no, I don't mean with "fear" or "respect" - but to take everything more seriously going forward).

Subtitle D—Detainee Matters SEC. 1031. AFFIRMATION OF AUTHORITY OF THE ARMED FORCES OF THE UNITED STATES TO DETAIN COVERED PERSONS PURSUANT TO THE AU- THORIZATION FOR USE OF MILITARY FORCE. (a) IN GENERAL.—Congress affirms that the author- ity of the President to use all necessary and appropriate force pursuant to the Authorization for Use of Military Force (Public Law 107–40) includes the authority for the Armed Forces of the United States to detain covered per-

2under the law of war. 3(b) COVERED PERSONS.—A covered person under 4this section is any person as follows: 5(1) A person who planned, authorized, com- 6mitted, or aided the terrorist attacks that occurred 7on September 11, 2001, or harbored those respon- 8sible for those attacks. 9(2) A person who was a part of or substantially

10supported al-Qaeda, the Taliban, or associated forces 11that are engaged in hostilities against the United 12States or its coalition partners, including any person 13who has committed a belligerent act or has directly 14supported such hostilities in aid of such enemy 15forces.

16(c) DISPOSITION UNDER LAW OF WAR.—The dis- 17 position of a person under the law of war as described 18in subsection (a) may include the following: 19(1) Detention under the law of war without 20trial until the end of the hostilities authorized by the 21Authorization for Use of Military Force.

22(2) Trial under chapter 47A of title 10, United 23States Code (as amended by the Military Commis- 24sions Act of 2009 (title XVIII of Public Law 111– 2584)).

†S 1867 ES

1 2 3 4 5 6 7 8 9

10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

428 (3) Transfer for trial by an alternative court or

competent tribunal having lawful jurisdiction. (4) Transfer to the custody or control of the person’s country of origin, any other foreign coun-

try, or any other foreign entity.

(d) CONSTRUCTION.—Nothing in this section is in- tended to limit or expand the authority of the President or the scope of the Authorization for Use of Military Force.

(e) AUTHORITIES.—Nothing in this section shall be construed to affect existing law or authorities, relating to the detention of United States citizens, lawful resident aliens of the United States or any other persons who are captured or arrested in the United States.

(f) REQUIREMENT FOR BRIEFINGS OF CONGRESS.— The Secretary of Defense shall regularly brief Congress regarding the application of the authority described in this section, including the organizations, entities, and individ- uals considered to be ‘‘covered persons’’ for purposes of subsection (b)(2).

Of Course! None of the customers will get back their money. It will go to the Bankers, the lawyers, the trustees running the show. All presumption that they are working in the customers interests are false, since they lot running the show are there to help themselves. The only way the customers will get there money back is if the Fed steps in to bail them out.

Ron Paul's Money Bomb site in South Carolina is up and running folks. Donate to help Ron Paul get to the White House and put a halt to the crooked FED Reserve, crooked bankers, crooked corporations, and get back to sound MONEY!!

Ron Paul doesn't get money from the fat cat bankers and corporations like Romney and the Grinch. The two swindlers are more of the same! It is time for a true Statesman to win and get our freedoms back.

That is no reason he should not run... and WIN. Then the millions of us who care about what happens to him can watch his back. Better yet, put somewhat 1000 times more agressively anti-government than Ron Paul as VP (like me), and they wouldn't DARE touch him.

If someone like me was president, the first thing they'd do is have the entire congress, the scum inhabiting the federal courts and most of the federal departments exterminated for treason, terrorism, crimes against humanity, and overthrowing the federal government. Yes, someone like that as VP would make the predators think very hard before trying to take out a mild-mannered gentleman and statesman like Ron Paul.

I can't believe the crap I hear from people just several generations after pioneers came to an largely empty, hostile continent and secured their lives. Makes me SICK.

LOL! We will see "Kick the Can" for a long time to come. Charles Biderman nails it. If TPTB stopped bailing and printing, they would all be out of a job (or worst sentanced to Death aka Reign of terror style). Expect the Bailouts, the lies, and the printing to go on for a considerable period (years). They will continue playing the game until hyperflation happens and there is no can to kick anymore. Expect Freedoms to disappear, capital controls, price controls, the works. There won't be any justice, the rich and powerful will continue to get away with theft, embezzlement, murder, etc. You think new laws like NDAA are to protect the common man? Hell no, they are there to Protect TPTB.

Get use to it!

"A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world's greatest civilizations has been 200 years.

Great nations rise and fall. The people go from bondage to spiritual truth, to great courage, from courage to liberty, from liberty to abundance, from abundance to selfishness, from selfishness to complacency, from complacency to apathy, from apathy to dependence, from dependence back again to bondage."

When I walked into the lab today Dave Ramsey was on the radio and was explaining to his listeners the reason gold and silver have gone up over the last decade was due to "conspiracy theorists" when I hear these financial charlatans tell there flock blatant disinformation I die a little inside

Dave Remsey and that other idiot financial quack/fraud Suze Orman have been diligently steering people away from gold and silver for the past decade.

They should be "runn oft" for their blatant quackery and gross ineptness at seeing the big picture.

Yep....steering people away from a 50% YOY return on their savings is what they've levied thus far upon their ridiculous cult following. When this is all said and done and the mania leaves these people in the dust....I would guess DR and SO will account for "jinxing" their listeners outta 1000%+ returns....and a most logical solution at insuring their future purchasing power.

When I walked into the lab today Dave Ramsey was on the radio and was explaining to his listeners the reason gold and silver have gone up over the last decade was due to "conspiracy theorists"

I guess I did "conspire" to preserve my purchasing power and gain real wealth as the fiat cards (globally) begin to fall one by one and every paperbug bagholder gets caught with his pants down (handing me that used to be purchasing power) because all of a sudden that paper bullshit that isn't actually worth anything is worthless.

Some complete motard from Profit Times who doesn't sign his essays
just wrote a complete reversal from two days ago regarding silver at
321gold.com

I found the read surreal in a Rod Serling TwilightZone way, which brought me to pause repeatedly, verifying, was my chair real, was I really on a balcony with a tropical breeze, were there really two suns...?

The banks already did performed a large scale heist with the TARP bailouts?

Just more fleecing with MF Global. Now on to the brokerage firms and fund raiding. The financial policing is almost non-existant. Who has been prosecuted or sitting in jail waiting for a trial? Everybody shrugs their shoulders and claims they have no idea where the money went.

The government can perform it's dog an pony show their doing something.